The Greek prime minister Antonis Samaras warned the stability of the eurozone
hangs in the balance after eurozone finance ministers failed to agree a deal
over bail-out funds.

The stability of the eurozone hangs in the balance, the Greek prime minister warned, after eurozone finance ministers failed to agree a deal to release its latest tranche of bail-out funds.

Antonis Samaras urged fellow euro members, the International Monetary Fund and the European Central Bank to settle their differences, after a 12-hour meeting into the small hours of Wednesday morning ended in stalemate.

“It’s not only the future of our country but the stability of the entire eurozone which depends on the success of the conclusion of this effort in the next few days,” he said in a statement.

Greece is waiting for €31bn (£25bn) of aid, which is being held up by a disagreement between the eurozone’s finance ministers and the IMF over how to make Athens’ debt load manageable.

The eurozone countries, led by Germany, are refusing to write off a portion of Greece’s loans. Norbert Barthle, budget spokesman for Chancellor Angela Merkel’s party, said doing so “would cost money [and] ... be a fatal signal to [fellow bail-out recipients] Ireland, Portugal and possibly Spain, as they would immediately ask why they should accept difficult conditions and push through difficult measures.”

Instead, they want to give Greece an extra two years, to 2022, to bring its debt down to its target 120pc of gross domestic product (GDP), from the 176pc level forecast for this year.

However, the IMF’s head, Christine Lagarde, is thought to favour eurozone states taking a hit over the loans.

Finance ministers from the 17 euro member nations are to meet again next Monday to address the issue.

As Greece waits for them to agree a path for the release of the funds, an increasingly frustrated Athens has had to issue short-term debt to pay maturing treasury bills and tide it over.

“Whatever technical difficulties [there might be] ... do not excuse any ... delay,” said Mr Samaras. “Greece has done what it had to and what it had committed to doing. Our partners, along with the IMF, also must do what they have undertaken.”

Separately, Spain’s central bank governor warned that the country could miss its target to reduce its budget deficit for 2012, due to the “very unfavourable” economic situation. Luis Maria Linde warned the current data “still doesn’t allow us to rule out the possibility of budget slippage.”